Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Heres what happened at ACME Manufacturing Company*: ACME makes shock absorbers for the Mercedes manufacturing facility and for a few other customers. Two days before

Heres what happened at ACME Manufacturing Company*:

ACME makes shock absorbers for the Mercedes manufacturing facility and for a few other customers. Two days before the auditors arrived to count ending inventory, the plant manager told the warehouse employees to load four tractor trailers with shock absorbers, lock them and park the trailers on the back lot. After giving those instructions she said: If anyone mentions this to the auditors, I will find out who you are and fire you! So, no one said a word.

Other facts that you should know:

Mercedes uses Just-in-Time for its inventory system.

ACME's terms for shipping and billing are FOB shipping point, prepaid and add.

Respond to the following:

Why did the manager order employees to hide the inventory?

How does what she did affect the financial statements?

What should the plant accountant do, if anything, about this situation?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Diversity In Library Collections

Authors: Rosalind Washington, Sarah Voels

1st Edition

1440878749, 978-1440878749

More Books

Students also viewed these Accounting questions